Oil’s Not Well At United Nations
by Ken Bell

“It’s all about oil” the protest signs proclaimed from San Francisco to Berlin—and so it was. But not in quite the dissenters postulated.

By now it should be painfully obvious to all but the most dull witted, inattentive or opportunistically vituperative critics of the Bush administration that the motivation for the liberation of Iraq had nothing whatsoever to do with “seizing oilfields”, “capturing cheap crude for cronies”, or petro-imperialism.

Nevertheless, we do now know that it was all about oil—and greed—for France, for Russia, and, most damning of all, for the corrupt, venal, avaricious and unaccountable bureaucracy of the United Nations.

It has already become an axiom of the conventional wisdom that the UN program developed to mitigate the suffering of the innocent Iraqi people under the regime of sanctions imposed at the conclusion of the first Gulf War, the “Oil for Food” program, was so corrupted and exploited by Saddam Hussein that it might better have been called “Oil for Palaces.”

But the reality is far worse than the conventional wisdom admits. Sufficient evidence has already emerged in the form of thousands of captured documents and the reluctant testimony of some of the principals involved that we can confidently conclude:

-- Far from serving “humanitarian” purposes, the chief effect of the Oil for Food program was to place yet another weapon in Saddam’s arsenal of repression, which exacerbated Iraqi suffering immeasurably.

-- France and Russia adamantly opposed “regime change” because their loyalties had been purchased with billions of dollars worth of blood-soaked oil, and they were willing to accept the deaths of thousands of Iraqi children rather than forego their profits.

-- Innumerable “conscientious dissenters” were in fact bought-and-paid-for advocates of Saddam’s murderous regime.

-- The United Nations bureaucracy itself was thoroughly corrupted by the program, up to and including the Secretary General of the United Nations, Kofi Annan.

-- Saddam Hussein used the cover of the program to transfer hundreds of millions of dollars directly into the coffers of Al Qaeda, the Taliban and other terrorist entities and regimes.

Oil for Palaces

The UN Oil for Food program was established in 1995 by the adoption of UN Security Council Resolution 986, which sought to create “a temporary measure to provide for the humanitarian needs of the Iraqi people” during the course of continuing economic sanctions. The terms of the agreement with Saddam Hussein were negotiated by then Deputy Secretary General Kofi Annan. Inexplicably, and portentously, these rules permitted the Iraqi dictator to choose who would distribute the oil and who would supply the goods obtained, subject only to the UN’s oversight authority. To perform this oversight and inspect the goods entering Iraq, the UN later contracted with a Swiss company, Cotecna, which had employed Kofi Annan’s son Kojo, first as an officer and then as a consultant, throughout the period of negotiation and up until the month before the contract was signed. Cotecna was represented as the low bidder, but in violation of the contract began almost before the ink was dry to increase its fees.

Ultimately, 60% of Iraq’s 24 million people were totally dependent upon food shipments supplied under the program. Saddam Hussein exploited that dependency as yet another weapon in his arsenal to compel subservience to his criminal regime. No cooperation, no food. And frequently, we have learned, the children of Iraq were provided rotten or substandard foodstuffs, diluted medicines, and shoddy or defective goods, even as the UN approved the import of such vital necessities as a Mercedes Benz for Saddam, and gold-plated fixtures for his palaces. There is no doubt that, amidst all the other horrors wrought by that evil government, even this “humanitarian” effort, intended to mitigate the suffering of the Iraqi people, brought suffering and death.

During the period from 1996 until 2003, Oil for Food generated revenue exceeding $67 billion for Saddam Hussein’s criminal regime. Kofi Annan himself has indicated a much higher figure of $111 billion, but the actual amount may never be known. The General Accounting Office estimates that Iraq further earned, illicitly, some $4.4 billion in kickbacks and hidden surcharges, and another $5.7 billion from oil smuggling.

As we now know, much of these funds (and additional indeterminate hundreds of millions in oil “vouchers” convertible into cash) went primarily to fund the construction of palaces, to purchase extraordinary luxuries, to conduct weapons acquisition and research, and to bribe—directly or indirectly—world leaders in such nations as France and Russia, journalists from Qatar to the United Kingdom, British MPs, such sleazy propagandists as former arms inspector Scott Ritter, and officials of the United Nations, including the director of the Oil for Food program, UN Assistant Secretary General Benon Sevan.

The UN profited enormously, having negotiated for itself a 2.2% commission on every barrel of oil sold, and an additional 0.8% charge to pay for weapons inspectors (until Saddam expelled them in late 1998). Over the course of the program, the UN’s cut approached $2 billion. It was far and away the largest, and most lucrative, UN program.

Because Saddam designated distributors and recipients of oil as well as suppliers, he was able to perfect a massive scam. The mainstream press, constantly agitating for a greater role for the United Nations in every aspect of American foreign policy, has been reluctant to excavate the details. But Hudson Institute fellow Claudia Rosett has done an extraordinary job of reporting on the scandal in the pages of the Wall Street Journal, Commentary and elsewhere. (You can find much of her excellent work at the website of the Foundation for the Defense of Democracies, www.defenddemo- cracy.org, with which she is also associated). The most crucial aspect of this scam was bribery through the issuance of vouchers. These vouchers authorized the purchase of designated amounts of oil, and could be converted by the recipients into dollars.

In January of this year the Iraqi newspaper Al Mada published just one list of recipients of these oil vouchers which it had recovered from Saddam’s oil ministry. The list contained 270 names from 50 countries, and included the name of the director of the Oil for Food program, Benon Sevan. Sevan, of course, denied the bribery, but has since taken an extended vacation pending his retirement. Meanwhile, the UN Secretariat has stonewalled inquiries, refusing requests for documents from the US General Accounting Office and writing letters to at least two contractors ordering them to refuse inquiries for information. Secretary General Annan ultimately felt sufficient pressure to appoint an “independent” commission of three, headed by former Federal Reserve Chairman Paul Volcker, to investigate the charges. But this commission has no subpoena powers, and will report exclusively to Annan. Some independence.

Committees of both the House and Senate have begun hearings on the question of UN culpability. Just how bad does it look as though it may be? Consider just one small item that Rosett reported in the April 18th National Review Online edition (www.nationalreview.com): one of the UN approved oil buyers designated by Saddam was “a firm with close ties to a Liechtenstein trust that has since been designated by the UN itself as ‘belonging to or affiliated with Al Qaeda.’”

Maybe now we can understand why John Kerry believes we can cooperate more closely with the UN: he knows they can be bought.

–From May 2004 Austin Review